Saturday, December 29, 2007

T. Cowen points out that the people downloaded more unauthorized copies* of Resident Evil: Extinction than any other movie, making "most illicitly copied" a dubious proxy for actual popularity.

Here are several hypotheses on what media people are likely to copy without authorization (I'm sure that others have suggested these same hypotheses before):

Guilty pleasures

If you would feel ashamed to admit paying for something, you're more likely to download a free copy of it. Also, most legitimately purchased media have a visible footprint in either the physical or virtual world: anyone who looks can see the DVD box on your shelf or the movie download in your iTunes collection. But for unauthorized copies, the only footprint is a movie file tucked away in some corner of your hard drive. Normally, the signaling aspect of a media purchase is a feature, but for guilty pleasures, it's the opposite.

Low-quality media

Media companies sell basically all media of a certain type for a similar price (e.g., about $17 for a new film on DVD). Possibly this is due to fundamental fixed costs of production (a DVD costs $X to digitally master and $Y per unit to manufacture, transport, and warehouse); possibly it's because of social processes (the studio exec managing film X projected $Y margin per unit at retail, and cannot release it at a lower margin without losing status within the company). Regardless, when a product is of exceptionally low quality, more people will see the dollar price as unwarranted, and they will be more willing to spend time seeking out unauthorized copies (see the next point).

Youth culture

Young people have more time than money, and a large appetite for media (more time to watch movies when you don't have a full-time job, children, or other responsibilities). Obtaining an unauthorized copy of something requires a trade of time for money.

Low-availability media

If a media product is difficult to obtain via authorized channels --- for example, if a product is not available for sale in your country, but is available overseas --- then you are more likely to seek out an unauthorized copy.

Improperly bundled products

If a media product is an aggregation of many separable parts, some of which are much more desirable than the others, then people are more likely to seek out an unauthorized copy of the parts they like.

I've never seen Resident Evil: Extinction, but I'm pretty sure that it falls squarely at the intersection of the first three of the above categories. Anecdotally, I think that many people know someone who would never pay for a Britney Spears album but has some kind of lame excuse for having a few tracks on their iPod.

The above hypotheses have several corollaries.

First, if unauthorized copying truly reduces returns to creators so much that it discourages creative output, then overpriced crap aimed at adolescents and young adults will be the first to go.

Second, media companies can reduce the amount of unauthorized copying by a variety of straightforward means, including:

Reduce the price of crappy products. (Duh.)

Offer very low-cost versions of media that require a time investment. For example, offer a low-cost subscription service where you must play a game for a certain amount of time (think World of Moviecraft) in order to obtain a download of a media product. Consumers who value time over money will still buy the DVD. Consumers who value money over time will play the game.

Sell "brown sleeve" versions of guilty pleasures. Sell junky movies and music in a disposable cardboard sleeve instead of a DVD keep case or CD jewel case with album art. Or even sell them in deceptive packaging: reverse the cover insert for your Resident Evil DVD, and it can look like some depressing and obscure Swedish existentialist art film that nobody will ever want to pull off the shelf.

* I refuse to use the term "pirated", as it trivializes actual piracy (the sailing-ships kind), and blurs the important distinctions between different forms of intellectual property infringement.